Annual report 2014
77
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.8 Impairment of non-financial assets
The carrying amount of assets, except for financial assets (excluding investments in subsidiaries,
associates and a joint venture), inventories and deferred tax assets, are reviewed at the end of each
reporting period to determine whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated.
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment
or more frequently if events or changes in circumstances indicate that the intangible asset might be
impaired.
The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to
estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash
generating unit (“CGU”) to which the asset belongs. Goodwill acquired in a business combination is
from the acquisition date, allocated to each of the CGU or groups of CGU of the Group that are
expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of
whether other assets or liabilities of the acquiree are assigned to those units or groups of units.
Goodwill acquired in a business combination shall be tested for impairment as part of the impairment
testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest
level within the Group at which the goodwill is monitored for internal management purposes and not
larger than an operating segment determined in accordance with MFRS 8
Operating Segments
.
The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value
in use.
In estimating the value in use, the estimated future cash inflows and outflows to be derived from
continuing use of the asset and from its ultimate disposal are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the future cash flow estimates have not been adjusted. An impairment
loss is recognised in profit or loss when the carrying amount of the asset or the CGU, including the
goodwill or intangible asset, exceeds the recoverable amount of the asset or the CGU. The total
impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the
CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset
in the CGU.
The impairment loss is recognised in profit or loss immediately.
An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other
assets is reversed if, and only if, there has been a change in the estimates used to determine the
assets’ recoverable amount since the last impairment loss was recognised.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised. Such reversals are recognised as income immediately in profit
or loss.
